Cybersquatter “Trumped” in New York District Court

The rich really do get richer. Last week, a federal magistrate judge awarded Donald Trump $32,000 in a case that pitted the billionaire business tycoon against a 34-year old Brooklyn “domainer”—a speculator in unused domain names that may later be desired by individuals and businesses. While we could write off this suit as yet another chapter in the bizarre canon of Mr. Trump’s litigation history it may indeed have implications for the world of online parody and freedom of speech. The judge’s award sent the message that cybersquatting, even when not done for profit, can cost you big time. But is this really what cybersquatting legislation was meant to protect, and does this case overly restrict online fair use?

Cybersquatting is the act of registering, selling, or using a domain name with intent to profit from another’s trademark. Celebrities such as Kevin Spacey and Bruce Springsteen faced difficulty in reclaiming their names from cybersquatters in early cases. To combat this, Congress passed the Anticybersquatting Consumer Protection Act (ACPA), codified at 15 U.S.C. §1125(d), in 1999. A plaintiff bringing an ACPA claim must essentially show (1) its mark—even if it is a personal name—is distinctive or famous; (2) the defendant’s domain name is identical or confusingly similar to the plaintiff’s mark; and (3) the defendant registered the domain name with the bad faith intent to profit from the plaintiff. The ACPA goes on to list nine nonexclusive factors that the courts may consider in determining whether a person acts in bad faith.

But the courts also must take into consideration genuine First Amendment and fair use defenses. In Mayflower Transit LLC v. Prince, the District Court of New Jersey held that the drafters of the ACPA intended to specifically target those with the bad faith intent to profit. Noncommercial uses of a mark, on the other hand, such as for comment, criticism, parody, or news reporting, were determined to be outside the scope of the act. While the defendant in Mayflower registered a domain that was confusingly similar to the plaintiff’s distinctive trademark, he did not act with bad faith intent to profit by using to website to criticize the plaintiff’s company. Conversely, in PETA v. Doughney, the defendant was not afforded First Amendment protection for creating a parody site under the name peta.org—People Eating Tasty Animals—when he suggested that PETA “settle” or “make an offer.”

In 2007, upon learning that Trump’s company planned to build condominiums in India, J. Taikwok Yung, the operator of “Web-Adviso,” officially registered the domain names “trumpabudhabi.com,” “trumpbeijing.com,” “trumpindia.com,” and “trumpmumbai.com.” Yung used the websites to “host political and non-political commentary, satire and ‘shared complaints of the poor quality ultra-low budget reality TV show The Apprentice.’” Trump offered to pay Yung $100 per domain name, which Yung refused, wanting a higher offer. In 2011, after an arbitrator ordered Yung to concede the domain names to Trump, Yung brought an action for declaratory judgment in federal district court.

Before damages were awarded, the court granted Trump’s motion for partial summary judgment in 2013, finding, among other things, that Yung acted with bad faith and that his claims were not protected by the First Amendment or fair use safe harbor of the ACPA. But Judge Irizarry made little of Yung’s negotiations with Trump and instead focused on the quality of the websites in determining Yung could not reasonably believe he was protected by fair use. The judge noted the site had not been updated since 2011, the “news” and “commentary” consisted of borrowed videos, and the critiques of The Apprentice were minimal. The political commentary was mostly dedicated to jokes at the expense of former congressman Anthony Weiner. The judge ultimately determined that the site was “haphazardly put together as an attempt to post minimal content under each category traditionally associated with fair use (e.g., news, politics, criticism) in an attempt to benefit from the ACPA’s safe harbor.”

While the evidence showed clear bad faith intent, and Yung’s First Amendment and fair use defenses were questionable, Judge Irizarry’s commentary on the quality of the site reveals that courts may look at factors beyond profit motive in assessing bad faith. Those who register domain names for commentary or parody purposes should keep in mind that their websites might be required to meet the characteristics described in this case. The court may look at whether the site is up to date, displays original material aimed at the mark holder, and even whether it is well organized. Judge Irizarry’s opinion places a harsher burden on the person seeking these protections than the Mayflower opinion did. We will have to see whether courts are similarly reluctant to grant fair use and First Amendment protection in comparable cases. The language of this opinion could potentially open the door to litigation against not only those with the intent to profit from a domain name, but even lazy or unoriginal commentators.